Capital gain tax on sale of gifted land

For immovable property, capital gains tax is applicable and income tax is not applicable.

Therefore, now when R is gifting it to N and N is selling it to a builder (presumably) for construction of Flats and may be part of the consideration a Flat to be constructed besides cash. N has to pay capital gains tax if any. Capital gains tax is calculated on gifted/inherited tax as follows:

Value of the immovable property on the day of it was gifted/inherited                 

Value of the immovable property when it is sold

Capital gains tax shall be calculated on the differential amount minus the eligible deductions like taxes etc.

This is basically a forum for clarifying on matters of law but not for tax matters. Therefore,, i

t is better you consult a good Tax Consultatnt preferably a Chartered Accountant with full details so that you can be guided properly.

The capital gains on gifted/inherited property is calculated as follows:

(a) Value of the immovable property on the day it was gifted/herited

(b) Sale Consideration received (including value of the Flat if any) whe the above property is sold

Capital gains tax shall be calculated on the diferential amount ((b) minus (a)) net of deductions like taxes etc.